Job Openings Ripped Higher in January, Outnumbering the Unemployed by 1 Million

Justin Sullivan/Getty ImagesJOHN CARNEY15 Mar 2019

American employers posted nearly 7.6 million open jobs in January, one million more jobs than the U.S. has officially unemployed people.

That nearly matched the record high set in November and confirmed the very strong jobs numbers reported in January, when payrolls reportedly grew by 311,000.

Friday’s report also revised December upward, with 7.479 million openings compared to the initial report of 7.335 million.

Although trade disputes were predicted to weigh on employment, the data show no signs of tariff induced strain. Openings are up 21.7 percent compared with a year ago when the Trump administration began announcing tariffs. Openings began to outpace the unemployed last spring, for the first time in the 18 years the data has been tracked.

The report, known as the Job Openings and Labor Turnover survey, or JOLTS, also showed that layoffs declined, a reassuring sign that tariffs imposed by the U.S. and retaliatory tariffs from China are not weighing on American worker

The Labor Department said Friday that hiring also rose and the number of people quitting their jobs picked up. Quits are a sign of a healthy economy, because people typically leave a job for another, usually higher-paying, one. “Take this job and shove it,” as the song says.

Nearly 3.5 million people quit their jobs in January, up 2.9 percent from the previous month. That could force employers to pay more to prevent their workers from quitting.

“The high quit rate is the major source of upward wage pressure, because high turnover costs are a strong motivator for employers to raise wages to retain their top talent,” said Julia Pollak, labor economist at ZipRecruiter.This combination–high openings, low unemployment, low layoffs–is a textbook recipe for rising wages.

And the strong job market is already pushing up wages more quickly, with hourly wages rising in February at the fastest pace in nine years.

The JOLTS report suggests the job market remains strong and bolsters most analysts’ expectations that steady hiring and rising wages will support faster growth later this year.

One note of caution: February’s payroll data was surprisingly weak, with just 20,000 added. That likely means the openings will shrink, as will some of the wage pressure.